Questions about wind energy, part 1

December 1, 2008

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The Amarillo Globe-News, in the heart of wind country, recently ran an editorial discussing our groundbreaking study on the costs and benefits of wind energy. It points out that that “too many questions remain unanswered.” Indeed they do. But we are trying to answer them. Here is one question I received from a banker who read our wind energy study:

Q: The tone of your paper seemed to be in favor of greatly reducing the subsidies and tax credits for wind energy. Do you think the current wind power subsidies will cost the Texas consumer more than using natural gas to generate electricity over the next 16 to 17 years? What about the next 50 years?

A: I think the fact that wind energy subsidies exist answers your question. If electricity from wind was cheaper than from natural gas, it wouldn’t need subsidies. The fact that investment in wind energy grinds to a halt anytime the federal production tax credit subsidy goes away makes the same case. If wind generators thought they could make money in the market by undercutting the price of electricity from natural gas, then they wouldn’t stop building when the PTC goes away. I don’t see this changing over the next 16 to 17 years. What about 50? Perhaps. If wind is every going to be an affordable and reliable “fuel” for generating electricity, it will be because affordable storage for electricity has been developed. Because wind energy just can’t meet our needs as long as it is dependent on the wind blowing when and where it is needed in real time. That could change in 50 years, but why should consumers be subsidizing wind energy up until that point?

The Foundation favors reducing wind subsidies because they are simply the government saying to the people, “We know you don’t want to buy wind energy. We know you think it is too expensive for you. We know you’d prefer lower cost alternatives. We know you are skeptical of global warming claims, and can’t understand why you should have to pay higher prices and earn lower wages because of a theory. But you are mistaken. So we are going to spend your money on wind energy anyway.”